June/July 2013

Legal Perspective

Keewatin vs. Ontario: less uncertainty for the mining sector

By Jocelyn Kearney

Ontario’s land management powers in treaty land disputes were preserved by the Ontario Court of Appeal’s March 18 decision in Keewatin vs. Ontario (Minister of Natural Resources), providing more certainty for developers in the mining sector. The case involved a challenge by Grassy Narrows First Nation to a forestry licence issued by the Ontario minister of natural resources to Abitibi-Consolidated Inc. allowing the company to carry out clear-cut forestry operations in certain parts of Treaty 3 territory. That 1873 treaty saw the Saulteaux Tribe of the Ojibway Indians surrender their interest in a large tract of land – in what is now northwestern Ontario and eastern Manitoba – to Canada, in exchange for reserves, payments, and other benefits. Under a harvesting clause in the treaty, the Ojibway retained the right to hunt and fish throughout the surrendered lands, except on areas “required or taken up for the settlement, mining, lumbering or other purposes by [the] Government of the Dominion of Canada.” Grassy Narrows argued that Ontario’s licence grant to Abitibi violated this harvesting right.

At issue on appeal was whether Ontario had the right to take up the lands in question without Canada’s approval. The trial judge had held that Ontario did not have the right to take up lands under the treaty, and could only authorize uses that do not substantially interfere with harvesting rights. Uses that interfere with harvesting rights would require the approval of the federal government, which had made the treaty with the Ojibway and to which the authority to take up lands was granted.

But the Court of Appeal allowed the appeal, emphasizing that the Ojibway’s treaty partner was the Crown, not Canada, and that beneficial ownership of the lands had been transferred to Ontario, together with the corresponding treaty rights and obligations, including the full power to take up lands. Further, the court found that a two-step federal-­provincial approach to taking up treaty lands was cumbersome and unnecessary to protect the harvesting right.

Perhaps most important was the appeal court’s reversal of the trial judge’s holding that Canada’s subsection 91(24) jurisdiction over “Indians” gives it a residual and continuing role in Ontario’s use of the “taking up” provision, which the Court of Appeal found to be at odds with binding case law. The court held that to expand this subsection to include a supervisory power over taking up of treaty lands would render provincial jurisdiction over the disposition of management of public lands and forests within the province illusory.

At first blush, the Keewatin decision is limited in effect, as Treaty 3 is unique in both its wording and historical context. However, in many ways, the decision helps provide the certainty and clarity that developers in the natural resources and mining sectors seek. The decision clarifies that in the context of historical treaties, the treaty promises were made by the Crown, and that only one level of government is required to step into the shoes of the Crown and carry out its responsibilities.

The decision also preserves the right of the provinces to manage their public lands. As a result, developers have some certainty that provincially granted licences and authorizations of Crown lands cannot be challenged for lack of federal approval or participation in the consultation process.

This decision does not, however, change the scope of consultation required before treaty lands can be “taken up.” The province cannot take up lands so as to deprive signatory First Nations of a meaningful right to harvest in their traditional lands, and any taking up must be preceded by consultation and, if necessary, accommodation. Developers are wise to actively participate in that consultation process, thus mitigating risks associated with inadequate consultation by, for example, holding early-stage discussions with the government to determine a consultation plan and the appropriate role for the developer. Recent amendments to Ontario’s Mining Act have helped clarify the proper roles and responsibilities of developers in the consultation process.

It is expected that the decision will be appealed to the Supreme Court of Canada. If so, the decision will have the effect of precedent throughout Canada. As of now, only the Ontario courts are bound by its precedent, though other provincial courts will certainly take this decision into consideration.

Jocelyn Kearney is an associate in the Toronto office of Norton Rose Canada LLP. She maintains a varied business law practice with emphasis on aboriginal and environmental matters.

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